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Socio-economic importance of ecosystem services in the Nordic Countries

Synthesis in the context of The Economics of Ecosystems and Biodiversity (TEEB)

image of Socio-economic importance of ecosystem services in the Nordic Countries

Nature provides a range of benefits (ecosystem services) that underpin human and socio-economic well-being. Many of these benefits – and the associated economic values – are not acknowledged in decision-making. As a result, nature remains almost invisible in the political and individual choices made. This report presents a synthesis of the socio-economic importance of ecosystem services in the Nordic countries. The study was initiated by the Nordic Council of Ministers (NCM) and the NCM Finnish Presidency in 2011, following in the footsteps of The Economics of Ecosystems and Biodiversity (TEEB) initiative. The study reveals that Nordic ecosystems play an integral role in supporting socio-economic wellbeing. However, a number of gaps in the existing information base still need to be addressed to ensure that these benefits are fully integrated into the Nordic decision-making processes.

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Economic valuation: approaches and methods

In general, several of the socio-economic values related to nature can be assessed in terms of economic valuation. In this context the different values are expressed and estimated as socio-economically driven decisions and trade-offs individuals are willing to make, usually expressed in monetary terms (e.g. Polasky and Segerson 2009). In the context of valuating nature, the economic value of ecosystems is based on the marginal changes in the provisioning of ecosystem services resulting from policy action – or inaction – and how people value these changes for their own well-being. In addition to the marginal changes, it is also possible to try assessing the overall and/or absolute economic values of ecosystems in a given moment (e.g. estimating the economic value of all world’s ecosystems). However, such attempts are generally considered rather of little or no practical use beyond awareness raising as most decisions facing policy makers, business and people are about marginal changes, not about absolute values of whole ecosystems. Furthermore, there are methodological problems with assessing the total economic value of ecosystems given these estimates would have to build on marginal values that are only appropriate in a specific context. Finally, it is crucial to recognise that economic valuation, in particular in monetary terms, is only one of the tools to assess value ecosystem services. There are several dimensions of human well-being that cannot – or indeed should not - be expressed in monetary terms including good social relations, freedom of choice and action and the intrinsic value of nature (Figure below) (Kumar 2010).

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